Tag Archives: personal finance

Three things I’m grateful for right now

 

So, here’s the reason I’ve been feeling down in the dumps lately. We made a decision that T would leave his job with nothing lined up (a first for us and an extreme move, yes – a topic for a separate, upcoming post).

That’s put us back to one income. We are definitely not living for today OR saving for tomorrow. Thus = unhappy me.

Rather than run down the street screaming, as I felt like doing at one recent low point, I thought I’d focus on the few things I’m currently grateful for.

(And I’m going to bite the bullet and book in a haircut – I’d been putting it off until he got back to work, but that is just ridiculous considering my haircuts are $30.)

Interest rates are on the rise

I’m currently earning 2.75% in my online savings account with my main bank, and 3.40% in my other savings account with my online-only bank.

Cheap rent

When we were searching for a place after returning to NZ, we were a one-income household. Not knowing when T would find work, it was important we live somewhere that I could afford alone. Since he’s been out of work for about half of this year, this has proven a good move, even if this place is like a deep freezer in winter. Low absolute rent also means it will be easier for us to save for a down payment … at some point.

Our rent is going up $20 a week next month, which I’m not happy about, but I’ve already been watching listings and there isn’t a lot of choice out there. We have a fantastic location and while it’s freezing and we don’t have a full kitchen, at least it’s not damp. Summer will be okay here and I think I can survive one more winter. Beyond that, we will either be on track to buying and decide to stick it out a bit longer, or give up on ever buying and fork out for a decent rental (whether agents/landlords will deign to choose us as tenants is the other hurdle, of course).

Side income

Being down to one income has meant more or less giving up on saving during this period. Yay for side income, which goes into my higher interest online savings account/mutual funds and stays there.

What are you feeling grateful for today?

Things I WON’T do to save money on travel

Camp

I don’t consider myself high maintenance, but I do have a minimum comfort level and camping does not meet it. I’m fine with hostels and seedy motels (“How do you always find the most ghetto places?!” T complained to me when we went wandering around east Berlin in search of our hostel) but I’m just not a tenting person. On a scale of 1 to Major Pain In The Ass, setting up and packing down tents rates just above scrubbing the toilet for me.

Hitchhike

First, the realities. I mainly travel with T, and nobody is going to stop to pick up someone who looks like him. I wouldn’t! Even our host in Munich, who’d been urging us to think about hitchhiking around Germany, demurred once we actually turned up and he met us in the flesh.

Even so, I don’t like uncertainty, and relying on passing cars to pick you up is about as uncertain as it gets in travel. (I remember waiting for ages one day for our Couchsurfing guests to arrive and wondering if they were going to turn up at all. Turned out they were at the mercy of hitching, and didn’t have a way to contact us to inform us.) Also not super keen on standing outside for potentially hours on end in any weather conditions to save some money.

Taking flights at crazy times

Super late flights may be a little cheaper, but that’s not the end of the story. There’s nothing worse than arriving  in a new city trying to find your way around in the dark! Public transport may not be running by the time you arrive, so you might have to take an expensive taxi, potentially negating any flight savings. In small establishments the front desk might close at 8pm. And it just screws up your schedule and body clock in general.



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Where do you draw your lines?

My top 3 money memories

nzmuse-money-memories

What purchases stand out most in your memory to you? A car? Wedding? A particular gift?

Running back through my memory banks, these are the three instances that jump out at me:

$6 fried rice Mondays

Back when I was in my first year at uni, Mondays were the day from hell. It was literally a 12-hour day, nonstop. I went to my first job in the morning, where I typed up documents and made photocopies. Then I’d rush down to Queen St and the underground International Food Court, where I’d buy a massive fried rice to get me through the rest of the day. After wolfing down lunch, it was off to classes, and then my second job from 4-8pm, loading newspaper content online.

That stall sold fried rice for $6 in 2007; now in 2014 it costs $8.50.

$700 guitar package

I worked my ass off during that year of high school, pulling evening shifts at a call centre and weekend day shifts at a cafe. What I could save now in a few weeks took me months back then, but I was so proud of myself. My reward: a red Ibanez RG170 and a 20-watt amp.

$30,000 RTW trip

Hmm, I’m sensing a pattern here… In the months leading up to our departure, I hustled into the nights and on the weekends bashing out freelance assignments to beef up the travel fund. The highlight was earning almost $1000 in a single day – a batch of five pieces I churned out in one sitting on a Sunday. But ultimately it all came down to one day last summer when I finally sat down and calculated the total we spent on the trip, and seeing that figure staring back at me. It’s an alarming number, for sure, but one with zero regrets attached to it. I know I’d much rather a $30k honeymoon than a $30k wedding.

Your favourite money memories … go!

Five material things that (would) make me happy

material girl in a material world

As a general rule, I am all about experiences over stuff. Stuff wears out, breaks, gets stolen.

But as reported in the Atlantic this week, some material goods actually CAN make you happy. And I’m definitely not going to argue with that. Here are the material things that make my life better …

My guitar

After nearly two years being guitar-less, I picked one up for $100 secondhand last month. I can’t tell you how much joy it’s bringing me. I’m never going to be much more than a dabbler, but I didn’t realise how much I missed playing.

Unlike my old guitar, it’s not a name brand, though, and for the first time I am finding out first hand what difference that actually makes. (Occasional fret buzz, less than smooth-looking neck/body joint, and prone to paint surface cracks.) But since I’m never going to be a serious muso, it’ll do just fine for now – and possibly for a long time.

Good quality kitchen knife

I can never go back to the days of sawing away at vegetables/meat with the kind of knife that now feels so flimsy I could practically bend it with my bare hands. No siree.

Expensive frypan

Likewise, I love my Circulon pan. Now I can actually make decent looking hotcakes, among other things!

A reliable car

Not something we’ve had the privilege of experiencing much, alas. Working on changing that.

A decent house

I dream of living in a house that’s properly insulated, warm and dry.  And hey, since dreams are free, let’s throw in a bonus heat pump. Still a way off…

Adulting, step 1: Looking at income protection and life insurance

Life insurance is one of those things I figured we didn’t need to worry about until mortgage/kids entered the picture.

But I’m starting to think that maybe sooner could be better (especially if we’re going to be taking on a car loan).

I’m mainly interested in the income protection aspect. Most standalone income protection don’t seem to cover redundancy, but some life insurance policies do offer redundancy cover as an add-on. That would alleviate my worry of major setbacks/hardship if T were to lose his job.

To be honest, I’m not sure it would have helped us this year, since the company let go T and a couple of others all within their 90-day trial period – which may not count as redundancy. But it would have helped back in 2008/2009…

And of course, life insurance is quite affordable as we are still young.

(Not that I’m worried about job security myself, but I already have life insurance through work now! Maybe it’s time to make it two.)

At the moment the two main options I’m looking at are life cover through his bank, and income protection cover through an insurer. Under the bank option we can get basic life plus redundancy, which is dirt cheap, and we could also add on temporary disability cover. The insurer option is pure income protection, including disability; it’s more expensive, but without getting into all the details, you do get more for your premiums. The disability cover could be useful in the event of illness, and to a degree, accidents. For injury, there is public ACC here to the tune of 80 percent of your earnings, although we had them refuse to cover T once a couple of years ago and that was a massive and costly pain in the ass.

This comment (on Reddit, no less) really hit me hard the other week:

A lot of people don’t realize how correlated events are. You are probably not going to lose your job, unless the economy goes really bad. If the economy goes really bad, that is the precise time when you cannot find any jobs because there are so many other people looking for jobs and few companies are hiring. That is also the time when you need to tap into your savings, but your stock portfolio will be decimated. You may want to borrow some money for the short term, but the equity in your home is gone too because real estate prices are all dropping and all your credit lines are cancelled because banks stop loaning money. Instead of “these things can’t all happen at the same time” it might be closer to “these things only happen at the same time”.

Now that we are above what I think of as the WINZ threshold – ie we earn/own too much, so that we’d have to both lose our jobs and use up most of what we have before being able to get assistance in the worst case scenario – it really is up to us to make provisions for ourselves.

Any advice on navigating the headache-inducing world of insurance?

Hitting the financial reset button

Comparing myself to others is always going to be something I struggle with. I’m old enough to realise that this is not a part of myself that’s going to change. And the best way to slay that demon is not to try and squash it, but kill it with reason.

Mostly, whenever I fall into the pit of comparison, I wind up feeling pretty depressed. Yes, we are mid 20s with no debt, but also no assets to speak of and little hope of escaping the hamster wheel of grim, mouldy rentals anytime soon. I can’t help but feel like we’re never really going to pick up pace.

When I think about the people our age I know who’ve managed to buy houses, they’ve all had advantages in one form or another. Most have had parental help – parents who paid some or all of their deposit, either using cash or equity in their own houses. Some have lived at home for years rent free. A couple have had cars bought for or given to them. Some have one partner in the relationship who earns significantly more.

For our situation to change, I think we need two things. One, steady and reasonably-paid employment on T’s part – considering his stints of unemployment add up to a couple years, plus a few more months’ worth of reduced and lost income from injuries on top of that, maybe it’s a wonder we aren’t even further behind. As this Billfold piece wisely observed last month, we really need to start accounting for unemployment in the current environment, and adjust financial advice accordingly.

Two, a steady and reliable car. Going the cheap secondhand route has not served us well. After so many years and a handful of different cars, we’re still exactly where we were on the car front as when we first started out – treading water with maintenance and repairs, with nothing really saved for a better and newer vehicle. Debt-averse as I am, I’m increasingly open to the idea of borrowing for a decent vehicle that we can drive into the ground (10 years at least?) so depreciation doesn’t matter. Vehicle financing options here are still kind of unappealing, but the other day I saw what might be the best offer I’d ever seen – something like 2 percent on new cars? – so things may be changing on that front. I’d much rather pay 2 percent on a new car than 10 percent on a used car that could have had any kind of history, and T’s experience from his stint in car sales should help us in the negotiation stage.

But for my own peace of mind, I think I need to scale back on my expectations. In some ways, this year has worked out better than I expected, but in many ways it also worked out much worse. The long term goal remains buying a house and escaping the terrible Auckland rental market for all the reasons I’ve covered on this blog before, like health, stability, pets, kids – but I’m going to refrain from setting a timeline or any hard measures, because I honestly don’t know what the next few years hold for us.

ClearlyContacts: Is buying glasses online a false economy or genuine bargain?

Confession: it’s been about four years since I got new glasses.

I got my eyes checked and got a new prescription last year, but figured I’d deal to it post-trip. That time came a couple of months ago, hastened by the breaking of my current pair.

My eyes are a lot more sensitive than they used to be (age? allergies?) and I can’t bear the thought of wearing contacts everyday. Laziness and comfort wins over vanity.

ClearlyContacts.co.nz has a great offer – first pair free – but with my terrible vision, my first pair was still gonna cost about $120 with shipping and high index lenses.

In comparison, getting new frames and lenses from a brick and mortar place would cost at least $400. However, I’d have the peace of mind knowing that those glasses would fit perfectly.

That’s a big difference in cost and a hard saving to pass up, I know. But I can’t overstate how important fit is. I’m one of those people who will be driven crazy if my glasses don’t fit just so and sit just right on my head. Which is easier said than done.

I have a freakishly wide head that rules out the vast majority of frames, which pinch into my temples. I need nosepads because of my pancake flat Chinese face, as I can’t just perch my frames on the bridge of my nose. (I wonder if this is why I have such trouble with snorkelling masks…)

Did I mention I’m also super picky about colour and style? I’ve only found one pair offline that I really like and that also fits well.

Most frames look and feel wrong before I’ve even got them all the way onto my head, so I’m very wary about buying frames off the internet. Even if I find a frame looks good on the virtualthat is a perfect numerical match on all my measurements (did you know those numbers on the inside of the arms of your glasses actually correspond to the length of your lens, bridge and arm? I didn’t!) and thus theoretically a good fit, and looks good in the ‘virtual mirror’ on the site, that’s not necessarily a guarantee that it will work in real life.

Everyone says they’re the real deal; I’m not concerned about quality or legitimacy. The only issue is true fit – something that’s hard to determine online. But since Clearly Contacts has a 365-day refund policy, I figured it was worth giving it a go. After all, it could only go one of three ways:

Outcome 1: Pay $120, find the Clearly Contacts pair fit like a dream, and voila, I’ve saved maybe $300

Outcome 2: Pay $120, find the Clearly Contacts pair don’t quite work for me, return it, and then buy the full priced pair in store. Once I get my refund, I’m no worse off financially.

Outcome 3: Pay $400 or so for the full priced pair in store and rest in peace with the knowledge I have a pair I love that fit perfectly (but wonder if the Clearly Contacts pair might have sufficed)

My first pair from ClearlyContacts just weren’t right. Technically they should have been more than comfortable – maybe even a little wide, on the loose side – but they pinched in. I thought they might wear in like a pair of shoes after a few days, but they didn’t.

Returning them was pretty easy – I just had to repackage them and send the box back, and my money was returned to my Paypal account not long after.

I thought I’d give it one more go before throwing in the towel. The second pair cost me a bit more – I couldn’t find any other frames that qualified for the ‘first pair free’ offer that a) I liked the look of and b) fit my measurements. But what do you know! It fit like a dream; the only downside is that this frame feels a lot flimsier and I’m not sure how long it will last. If it manages at least a couple of years, I’ll be okay with that.

Have you bought glasses online recently?

Joint credit cards and other such shenanigans

By: PersonalMoneyNetwork

Ah, credit cards. Love ‘em or hate ‘em, there are times when they are just an outright necessity.

Before we left on our big RTW trip, getting a credit card organised for T was one of the many annoying things we had to do. He’s the driver in our pairing (I hate driving and don’t have my full licence) but had never had a credit card of his own. He didn’t go to uni, so he never had banks offering him sweet deals on overdrafts and credit cards on campus during orientation.

Ironically, as it turned out, he didn’t even need it. Yes, car rental companies require you to show a credit card in the name of the driver when you turn up, but we prebooked through CarHirePlanet, which took a small deposit early on and then charged the full amount a couple of weeks before pickup, strangely. I had used my credit card to make the booking, so at no point was any part of the rental charged to his. And of course, when we picked up the car there was no balance owing, and the terms of the booking meant we were fully insured with a zero excess so even if we had an accident there would be nothing to pay.

When we popped over to Australia last week, although I booked through the same site, things were categorically different with this particular Cairns rental company. The excess would be $3300 (yikes) and payment was to be made on pickup using a card in the driver’s name. Debit cards incurred an extra fee and of course require you to actually have the full amount available in your account. It’s one thing to have a few grand of credit placed on hold; another entirely when it’s a few grand of your own cash being held hostage.

We’d cancelled his credit card when we got back to NZ, and with so little time before we actually left for Australia (last minute trip!) and the fact he’s currently between jobs, the odds of him getting a credit card with a high enough limit were not looking good.

The solution: an additional credit card for him linked to my Visa. This is different from a joint credit card – this means as the primary card holder I remain responsible for the account. The process was relatively quick and easy and his card arrived just in time a couple of days before we departed.

While I’m not loving the idea of paying another $12 in annual fees for his card, you never know when you might need it – and I reckon it’s easier to have one on hand than to find yourself scrambling for one. We’ll probably keep this one this time around.

Do you have a shared credit card with your partner?

Finance = money & money = sexy. If only my 13-year-old self had known that

money is the most important thing - financial literacy and financial education

My first memory of year 9 maths in high school is being teamed up with two others, going to the local supermarket  and calculating what food and supplies would cost for a family for a week. Let me tell you, it’s really awkward talking about toilet paper and tampons with people you barely know…

But that wasn’t my first foray into this kind of thing.  I’ve long known the value of a dollar.

Growing up, I literally do not recall seeing my mother ever buy anything that wasn’t on sale. When I was about 10, my best friend and I went to the supermarket to buy snacks and drinks. We were super proud about finding a 1-litre Coke for $1 and gushed about our frugality to her dad.

“That’s a good buy,” he said, and smiled. But when I told my mum about it later on? Her reaction: I can get 1.5 litres or 2 litres for the same price. Way to shoot down the kids, but she’s always been the bargain queen, and a blunt one at that.

Shortly after that I got my first paying gig, a paper run, and later on I would work TWO jobs in high school so I could buy an electric guitar and amp. I’ve always, always saved. I couldn’t really say why, as for years there was nothing I was saving for; I just knew it was the thing to do. Somehow my parents instilled that in me (thanks guys).

Business as a subject, though? I thought it was deadly dull and wanted nothing to do with it. Business studies was compulsory for a little while (maybe over the duration of one term) early in high school. You could then go on to do accounting or economics, and as you can probably guess, I chose not to do either. My mother is an accountant, something I thought was the most unimaginative and boring thing one could possibly be, and economics held no draw for me, either.

Of course, the older I get the more important I realise all of that is. Getting a grip on how the economy works is kind of a basic requirement of adulthood, I reckon. 

Knowing how the official cash rate impacts interest rates, for example – that affects savers and borrowers alike.

Understanding general business principles too, which will serve most of us well because most of us do wind up in business, one way or another, to some degree. Yes, even those of us who pursue creative fields – who in many ways would benefit MOST from learning what being a professional in a capitalist society really involves. I‘m in an industry trying to figure out how to make money to sustain itself, and understanding the market and customers is vital to that. And amazingly, I’m finding this is actually quite interesting – and challenging.

I also believe understanding finance from a broader point of view is invaluable. While I’ve never been hugely interested in passive income – I like my work and don’t have any ambitions to retire early – recently I’ve been thinking about income security and growth. It really hit home for me that apart from trading your time for money, there are only a few paths to earning income. Here’s how I see them:

  • Investing in the stockmarket
  • Investing in real estate
  • Producing products (presumably digital) that you create once and then continue to sell indefinitely, no extra effort required on your part

It would  have been good to learn some of this stuff in school, because, um, who DOESN’T want to make money? Everyone, even high school kids (maybe ESPECIALLY high school kids) is interested in making more money.

I’m not saying there aren’t opportunities to learn and get involved in this kind of thing. For example, there are student stockmarket challenges you can participate in –  one of my classmates did really well on those, making a ton of (theoretical) cash. But that kind of thing didn’t interest me back then, and in fact kind of intimidated me, so I didn’t seek them out. Also, it was all kinda nerdy and I was desperately trying to escape the pigeonhole of nerd-dom back then.

How things change. Money is sexy. I know that now. I REPENT. 

How to deal with a layoff gracefully: Advice for couples

how to deal with a layoff gracefully
Like I blogged just last week, sometimes I feel like we’re never going to get ahead financially.  Still, things are what they are and whinging never got anyone anywhere.

That said, I’m big on honesty and I’m not going to lie, being forced back into one-income land sucks. Of course, it’s even worse for T, but I’m not particularly enjoying things either. Selfish? Yes. True? Abso-frickin-lutely.

Rather than subject you all to a wave of self-pity, I thought I’d consult some other smart bloggers about coping in the aftermath of a layoff and dealing with all the feelings that follow – gracefully. Here is our collective wisdom.

Be mad, but then shake it off

You will resent being the only one bringing in an income (particularly if your partner is not a good housekeeper, on top of it all). Acknowledge it, but remember that nobody is winning in this situation and try to move past the anger. Definitely do not lash out!

As Gina Marie Rose sagely observes: “I know it’s hard not to feel resentful toward your partner when you’re the only one bringing in money, but do your best not to make them feel guilty about it. Trust me, your partner does not want to be unemployed, broke, and having someone else support them financially.

“But sometimes, shit happens and we have to face circumstances that are out of our control, like layoffs. Being unemployed and broke is one of the worst predicaments in the world; the last thing your partner needs is for the one person they love most to make them feel even worse about it.”

Michelle from Fit is the New Poor says: “I often reminded myself how much I loved him and how he was there for me financially and emotionally in the past. He did his part by understanding when I needed space or to blow off steam.”

Sally from Tiny Apartment Design, for one, has left several jobs during her relationship. “It’s tough when you feel like you are carrying the weight of two people, but I find it helps to talk about it, uncomfortable as it is,” she says.

Vent to someone else

Let it all out … but not just to your partner.

Gina suggests venting to people you trust and who you know won’t change their opinion of your partner as a result.

And find some stress relievers that work for you.

“During the whole time Chris was unemployed, I practiced yoga 3-4 times a week. Probably one of the best decisions I made during that time!”

Lend an ear

And of course, let your partner vent too.

Says Gina: “Listen to them vent about their recent job rejection. Ask how that networking event was that they recently attended. Let them cry on your shoulder when they feel hopeless and like they’ll never get a job. Being unemployed and broke sucks big time, so be supportive. You’d want the same from your partner if you were in their shoes.”

Focus on the silver linings

No job is perfect. So take the opportunity to remember all the downsides of that old job, and thank your lucky stars that you guys no longer have to deal with them!

According to  Michelle: “I would be mad at him for losing his job, but then I would remember all the times he would complain about his boss making him stay late or emotionally abusing him, and I would go back to thinking that this may be a better way!”

Be supportive on the job-hunting front

Not that this really needs stating, since you BOTH want to get back to the full-employment bandwagon…

Check your partner’s resume, edit cover letters, trawl your list of contacts for anyone who might be helpful to him, keep an eye out for interesting job listings, rehearse answers for interviews.

“I remember the first time Chris did an interview role play with me: it helped me memorise my answers better and feel more confident when it came to saying them out loud,” Gina says.

Michelle suggests asking the hard questions your partner might not consider, be it in regard to interviewing or to choosing jobs.

Keep a tight lid on your finances

Now, more than ever, is the time to keep on top of your money. I revisited our 2014 budget but the key is tracking our spending, especially with T’s habits.

“Since you’re now providing for two people, it’s probably a good idea to keep a close eye on your finances so you can save money where possible,” Gina says. “I didn’t do this while I supported Chris, and I regret it! I feel like my money went so fast during that time because I wasn’t keeping track of what was going in and what was going out, and I didn’t change my spending habits even when money got tight.”

Budget in little treats

Much as I would like to forbid T from spending a single dollar until he finds a job, that’s pretty cruel and also insanely unrealistic. We’ve settled on $20 a week, although in reality that’s creeping higher.

Gina’s advice? Treat your partner once in awhile.

“While I was unemployed, I was depressed because not only did it seem like no one would hire me, but I didn’t have any money to go out and do things or treat myself. Chris saw how depressed I was and decided to take me out to lunch/dinner/a movie every so often to help get my mind off my job search. He also spoiled me rotten for Christmas. (Being unemployed during the holidays is the worse because it’s a season of spending buy you have nothing to spend!)

“When Chris was unemployed, I treated us to a little getaway to Santa Cruz for a couple days. Do what you can afford and know that your partner REALLY appreciates the distraction.”

Michelle encouraged her husband to be active outside of the home while unemployed. “He was depressed, obviously, but we would still go out with friends or on (cheaper) dates. I would also put him in charge of dinner so he felt like he had a purpose and was “paying me back.” Our house was spotless for the time he was unemployed!”

And plan to celebrate when your partner finally lands that job.

“We ended up going on vacation with our travel miles. I think all of that kept a ‘light at the end of the tunnel’ feeling going for us when we felt like our situation would never change.”

I’ll wrap up with this succinct summary from Michelle:

“Celebrate the good because there won’t be much of it, remind yourself that you love him despite his situation, give him tasks and jobs to do to keep him active, and try to think of an awesome celebration for when he does get a job!”

Do you have any pearls to add?